Identifying Profitable Hospitality Ventures in 2026

Listen to the short article 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic uncertainty that stifled growth for hotels, hospitality industry leaders are looking toward 2026 with mindful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier segments might have a hard time amid a growing wealth bifurcation.

And through everything, hotel companies are expected to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading trends expected to effect hotel operations, performance, net system development and more this year.

Overall incomes, earnings and advantages paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor costs present an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

The Future of 2026 Corporate Expansion Milestones

"It is an absolute concern." Rising labor expenses have actually been an obstacle for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating income, according to AHLA. In recent years, thousands of union hotel employees have actually gone on strike requiring higher wages in order to stay up to date with the increasing cost of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New York City, where the New York Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

In 2015, the union backed New york city City's freshly elected Mayor Zorhan Mamdani, who ran on a pledge to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually knocked similar legislation across the country, including the recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this rate," she said. "We're likewise seeing these obstacles compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and expenses are skyrocketing, the mathematics just does not build up." Salaries, earnings and payroll-related expenses paid by hotels now account for more than 32% of total profits, according to AHLA.

Expert Ways to Boost Market Share via Expansion

As more hotel guests turn to artificial intelligence to enhance their travel experience, reserving hotels straight through large language designs (LLMs) may be next, hospitality professionals said. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a trend that has actually sped up throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to utilize AI for travel suggestions. A smaller percentage (57%) said they 'd be likely to utilize it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are searching [via LLMs] for items and services in travel has swollen in the last 12 months and is speeding up every day," Kletzel stated, including that undoubtedly, hotels will "take a hard take a look at how they can enable commerce and deals through agentic [AI]"" [Brands] can develop on the trust they already have if they do an excellent task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and alter the way the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which lots of brand names aren't, and this is the big panic that they're all going through today customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their property information is being indexed by LLMs to appear in traveler inquiries.